A change in labor productivity shifts the __________ curve and a change in the exchange rate shifts the __________ curve.
A) SRAS; SRAS
B) AD; AD
C) SRAS; AD
D) AD; SRAS
E) none of the above

Question

Quizplus · Accepted Answer

A change in labor productivity shifts the Short-Run Aggregate Supply (SRAS) curve because it directly affects the quantity of goods and services an economy can produce at a given price level. A change in the exchange rate shifts the Aggregate Demand (AD) curve because it affects the cost of domestic goods for foreign buyers and the cost of foreign goods for domestic buyers, influencing the overall demand for goods and services in the economy.

A Change in Labor Productivity Shifts the __________ Curve and a Change